Stock-Based Compensation

6 Months Ended

Jun. 29, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 10 — Stock-Based Compensation

The cost that has been charged against income for stock-based compensation is set forth below (in thousands):

	Three Months Ended				Six Months Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Employee stock options	$	897	$	493	$	1,516	$	761
Restricted stock		59		46		110		86
Restricted stock units		494		329		1,092		531
Nonemployee stock options		148		—		181		—
Total	$	1,598	$	868	$	2,899	$	1,378

The Company recorded stock-based compensation costs in the following categories on the accompanying Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended				Six Months Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Cost of sales	$	4	$	2	$	7	$	4
General and administrative		655		394		1,174		658
Marketing and selling		366		228		826		344
Research and development		573		244		892		372
Total stock-based compensation expense		1,598		868		2,899		1,378
Amounts capitalized as part of inventory		145		110		267		162
Total stock-based compensation	$	1,743	$	978	$	3,166	$	1,540

Stock Option Plan

Our Amended and Restated Omnibus Equity Incentive Plan (“the Plan”) provides for various forms of stock-based incentives. To date, of the available forms of awards under the Plan, the Company has granted stock options, restricted stock, unrestricted share grants, restricted stock units (“RSUs”), and performance contingent stock units. Options under the plan are granted at fair market value on the date of grant, become exercisable over a three-year period, or as determined by our Board of Directors, and expire over periods not exceeding 10 years from the date of grant. Certain option and share awards provide for accelerated vesting under certain circumstances in the event of a change in control (as defined in the Plan). Pursuant to the Plan, options for 4,183,656 shares were outstanding at June 29, 2018 with exercise prices ranging between $0.95 and $29.80 per share. Restricted stock grants under the Plan generally vest over a period between one to three years. There were 11,073 shares of restricted stock and 353,801 RSUs outstanding at June 29, 2018. As of June 29, 2018, there were 2,504,392 shares available for grants under the Plan.

Assumptions

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model applying the weighted-average assumptions noted in the following table. Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted is derived from the historical exercises and post-vesting cancellations and represents the period of time that options granted are expected to be outstanding. The Company has calculated an 11%

estimated forfeiture rate based on historical forfeiture experience. The risk-free rate is based on the U.S. Treasury yield curve corresponding to the expected term at the time of the grant.

	Three Months Ended						Six Months Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017

Expected dividend yield		0	%		0	%		0	%		0	%
Expected volatility		53	%		57	%		53	%		57	%
Risk-free interest rate		2.81	%		1.81	%		2.70	%		1.95	%
Expected term (in years)		5.72			5.67			5.72			5.67

A summary of option activity under the Plan for the quarter ended June 29, 2018 is presented below:

	Option Shares (000’s)
Outstanding at December 29, 2017		3,725
Granted		786
Exercised		(306	)
Forfeited or expired		(21	)
Outstanding at June 29, 2018		4,184
Exercisable at June 29, 2018		2,689

A summary of restricted stock and RSU activity under the Plan for the quarter ended June 29, 2018 is presented below:

	Restricted Shares (000’s)			Restricted Units (000’s)
Outstanding at December 29, 2017		21			488
Granted		11			47
Vested		(21	)		(177	)
Forfeited or expired		—			(4	)
Outstanding at June 29, 2018		11			354